NJ.com

N.J. Lawmakers: Boost Federal Tax Credits For Working Poor

NJ.com — October 26, 2016

By Samantha Marcus | NJ Advance Media for NJ.com

TRENTON — Assembly Speaker Vincent Prieto and New Jersey anti-poverty advocates on Tuesday threw their support behind federal proposals to expand the Earned Income Tax Credit for childless low-income workers.

The tax credit is popular among Republicans and Democrats and considered one of the nation's most-effective tools against fighting poverty. But it can do more for working adults who aren't raising children, they said.

"What we see in our tax center is that too many young workers and workers without children are being left behind from the economic benefits of the Earned Income Tax Credit," said Ann Vardeman, program director at New Jersey Citizen Action.

The three competing proposals to expand the federal tax credit would benefit 343,000 to 504,000 additional New Jerseyans, according to New Jersey Policy Perspective, a left-leaning think tank that issued a report to coincide with the push.

All of the plans would open the program to additional workers from 21 to 25 years old and increase the maximum possible credits from the current $506 to between $1,000 and $1,500, depending on the proposal.

At present levels, a low-wage worker without dependent children can receive no more than $683 from the state and federal programs, according to Policy Perspective. The various plans would boost that by $667 to $1,342, the report said.

U.S. Sen. Cory Booker (D-N.J.), along with Sen. Tammy Baldwin (D-Wis.), are behind the most generous expansion, which would lower the age of eligibility to 21 years, raise the maximum credit to $1,500 and allow more workers to qualify for that higher credit.

At least 122,000 New Jersey workers 21 to 24 years old would be newly eligible, according to the report. It would also raise eligibility at the other end from 65 to 66 years old.

This kind of expansion is badly needed in New Jersey, the group said, where "nearly half of young adults between 18 and 34 years old live at home with their parents — more than in any other state — thanks to few job opportunities, low wages and the high cost of housing in the Garden State."

A plan backed by President Obama and House Speaker Paul Ryan (R-Wis.), would bring in 101,000 workers here between 21 and 24 years old, the report said.

The Democratic-controlled Legislature and Gov. Chris Christie, a Republican, recently agreed to raise the tax credit for the second time in as many years as part of the transportation funding tax package.

The state tax credit will rise from 30 percent of the federal credit to 35 percent. Advocates said that will be a help to workers raising children, but the existing program is severely limited for those who are not, with no benefits going to those under 25 years old.

"I've been very proud to move the threshold up, and we'll keep fighting to make sure we help every New Jersey resident to bolster and rebuild our middle class," said Prieto (D-Hudson), who was joined by state Sen. Shirley Turner (D-Mercer).

The state credit, which piggybacks on the federal one, would get a boost as well from expanding at the federal level.

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